Reid said he was disappointed that little progress had been made in the debt talks.

"They talked some happy talk about doing revenues, but we only have a couple weeks to get something done," Reid said about Democrats' negotiations with Republicans. "So we have to get away from the happy talk and start talking about specific things."

Despite his tone of frustration, Reid also said he is optimistic that lawmakers ultimately will reach a deal to head off the Jan. 1 convergence of $600 billion in tax increases and spending cuts that threatens to trigger another recession.

"I'm extremely hopeful, and I do not believe that the Republicans are going to allow us to go over the cliff," Reid said.

He said he hoped Republicans can agree to tax rate increases and that Democrats were happy to deal with entitlements.

Fresh from his Nov. 6 re-election, Obama wants to extend low income tax rates for middle-class Americans, but let tax rates rise on income over $250,000 a year per family.

Republicans oppose this position and favor extending low income tax rates, adopted during the administration of former President George W. Bush, for all income levels.

Without action by Congress, the Bush tax cuts will expire at year-end and rates will go up for most taxpayers.

The tax rate dispute is the central obstacle to an agreement that would prevent the nation from plunging off the fiscal cliff, a convergence of an estimated $600 billion in tax increases and spending cuts that threatens to trigger another recession.

"There remains no clarity on the ultimate status on the Bush tax cuts, which have to be resolved before you can move forward with the remainder of the fiscal cliff," said Chris Krueger, an analyst at Guggenheim Securities' Washington Research Group.

The debate in Congress raged on as the government reported another increase in planned U.S. business spending in October. Despite market worries about fiscal policy, the Dow Jones industrial average was up about 15 percent from a year ago.

Republicans have not shifted from their stance against any tax rate increases, but a few have been publicly disavowing a no-new-taxes pledge to which most of them have adhered for years, putting tax revenues, if not higher rates, on the negotiating table.

Reid Slams Norquist

The pledge — enforced by fiscal austerity activist Grover Norquist and his group Americans for Tax Reform — came in for renewed criticism from Reid.

"For years, Norquist has bullied lawmakers. ... So I was pleased to see a few Republicans in Congress distance themselves from Norquist this week," Reid said on the Senate floor.

Norquist appeared Tuesday on Fox News and said talk of Republicans backing away from his pledge was "a complete media-created frenzy."

"Progressives should be willing to talk about ways to ensure the long-term viability of Medicare and Medicaid" for the elderly and poor, Durbin said in excerpts from a speech.

But he added that Medicare and Medicaid should not be part of the current negotiations on averting the fiscal cliff. On that front, Durbin stood firmly with Obama, urging extension of middle class tax cuts for 98 percent of Americans.

As part of a multi-pronged push on taxes, Obama planned to meet with a group of small-business owners on Tuesday. On Wednesday he will host leaders of larger businesses. Then on Friday, he will visit a manufacturing facility of The Rodon Group, a small toy company in Pennsylvania.

Obama's visit and his meetings at the White House are meant to pressure Republicans to extend tax cuts for middle-income people and end them for wealthier families.

A pressure group called Fix the Debt — which includes budget deficit hawks and corporate leaders — scheduled its own news conference for Wednesday to urge Congress "to enact a plan that would allow us to steer away from the fiscal cliff and further economic instability."

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